Types of 0% Intro Rates

Some credit card issuers and banks in the US offer a 0% intro rate only on purchases or balance transfers, while many combine both for more favorable offers.

0% intro APR on purchases

A credit card with no APR on purchases1 for a specified introductory period lets you buy anything without paying interest. You only must provide the minimum monthly payments on time – that’s your credit card statement balance. These offers are ideal for financing a significant purchase or covering unexpected expenses.

0% intro rate on balance transfers

A credit card with no APR on balance transfers for a predetermined period lets you pay off an outstanding debt with another credit card issuer or banking institution. You transfer the amount you owe to another account to leverage an appealing promotional offer and save money. That’s perfect if you have outstanding debt in a high-interest credit card account. Moving it to a 0% intro APR card can help you save significantly, even if you carry a balance once the promotional period ends. You’ll have paid off a considerable amount without interest by that time.

What Happens After the 0% Intro APR Period?

Once the 0% intro APR period ends, your credit card’s regular APR will kick in, accruing interest costs on your outstanding balance.

Let’s say your outstanding balance after the intro period is $1,000. Your credit card’s regular APR is 17.96% – the average credit card interest rate2. Dividing it by 12 (months in a year) gives you 1.49%, making your monthly interest on that specific balance $14.9. That’s only one month, and many credit cards have higher rates.

Paying off your entire debt before the promotional period ends is crucial to avoid a high APR. Choosing a credit card with a favorable APR is also vital, primarily if you don’t think you’ll return the borrowed funds before the specified timeframe.

If you carry a balance after the intro APR period, you can transfer it to another 0% intro APR credit card, ask for a lower rate, or pay off your debt over the following few billing cycles. You may qualify for a lower interest rate if you’ve been a responsible cardholder – for instance, paid off your balance in full and on time every month.

Frequently Asked Questions

Reference Index

  • What Is Purchase APR? Forbes
  • Current Credit Card Interest Rates. Bankrate
  • What is a Balance Transfer? Experian